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BAM Stock: A Canadian Gem Worth a Look

Stock MarketsSep 27, 2021 07:30PM ET
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© Reuters. BAM Stock: A Canadian Gem Worth a Look

Brookfield Asset Management (BAM) is one of those Canadian stocks that can offer you a better bang for your buck.

The Toronto-based alternative asset manager provides investors with exposure to a wide range of alternative assets (think real estate, renewable energy projects, infrastructure, and other "real" or tangible income-producing assets), many of which provide a solid and lowly correlated return versus common stocks.

With bonds and other risk-free securities likely to remain unattractive for years to come, Brookfield's portfolio of alternative investments are that much more appealing.

Shares of BAM are up 70.4% over the past year. Despite the momentum and now-heightened valuation, I am bullish on the name, and don't see any fundamental reason why BAM stock would surrender a sizeable portion of its recent gains. (See BAM stock charts on TipRanks)

Brookfield's Investor Day

Recently, Brookfield had its annual Investor Day, laying out a plan to double in size over the next five years. For a $87.4-billion company, such a plan is remarkable.

If the company can deliver on its plan, investors could be in for more than 20% in annualized returns through 2026. I think the odds are on BAM's side, given that the tables could continue to be tilted in favor of alternative asset managers in a low-rate environment.

Should the right cards fall into place, Brookfield may reach its goal ahead of schedule, and at these modest valuations, the stock could prove to be a bargain that's worth travelling north of the border for.

Recently, Brookfield announced that it had formed a strategic partnership with private real estate investment company Elion Partners worth around $1 billion. This is just one of many deals that will likely push BAM closer towards its ambitious five-year goal.

Wall Street's Take

According to TipRanks' analyst rating consensus, BAM stock comes in as a Strong Buy. Out of seven analyst ratings, there are six Buy recommendations, and one Hold recommendation.

The average BAM price target is $62.05. Analyst price targets range from a low of $48.36 per share, to a high of $71 per share.

Bottom Line

There's a lot of appeal in real assets. In this market, where bonds will earn you next to nothing, there's a strong case for betting on a firm that's effectively a one-stop shop for alternative assets.

Disclosure: Joey Frenette doesn't own shares of any mentioned companies at the time of publication.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

BAM Stock: A Canadian Gem Worth a Look
 

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